Click to learn more about author Alexey Chalimov.
Fintech applications this year represent one of the fastest-growing markets that involve online activity. It’s not simply about money transfers anymore: The digital finance industry now offers users insurance, mortgages, loans, and crowdfunding opportunities, to name a few, and the diversity of the available banking services keeps increasing.
The size of the fintech industry is expected to surpass $26,521 billion by 2022. In this rapidly changing environment with a booming competition, learning how to get into fintech successfully is crucial for building a robust and profitable app.
In this article, we’ll examine the latest fintech trends and challenges and give you a brief step-by-step guide on how to kick off the development of your own fintech platform.
Five Types of Fintech Apps
Fintech is an umbrella term for numerous kinds of applications that involve handling real money. The kind of idea you have affects how hard it is to develop the app: The complexity of the app gives you a sense of the expected budget and time requirements, and the audiences you plan to target.
Below are some of the most popular types of fintech apps in 2021.
1. Money transfers
Services like PayPal, Stripe, and WebMoney allow users to quickly transfer funds. They typically offer currency conversion, transaction history tracking, and the ability for users to identify each other.
2. Finance management
Personal management apps are growing in popularity as more and more people start using their phones to track expenses. These platforms help organize a user’s finances, categorize spendings, display statistics, and calculate how much to save each month for a particular established goal.
Stocks trading fintech applications are also rapidly growing due to the surge of machine learning tools for analytics. Users gain the ability to rely on data and use technology to make better-informed investment decisions.
After a sudden drop in 2020, insurtech is starting to grow again, with the pandemic accelerating the process. Mobile applications that provide online assistance and guidance on the best options, as well as help getting insurance without leaving the house, are receiving the most spotlight.
5. Cryptocurrency trading
Applications that enable cryptocurrency trading represent a highly competitive yet lucrative market. Some of the top fintech examples in cryptocurrency trading include Coinbase, Binance, Pionex, and CEX.io.
Modern Trends and Challenges in Fintech App Development
Since the fintech industry conducts financial operations, creating an application requires having specific knowledge of how fintech works and how to fight several challenges inherent to this field.
What Are the Biggest Challenges in Fintech?
The main concern for any financial technology startup is cybersecurity. You need to ensure your users’ funds and data are protected, and the application is resilient to potential attacks. Take precautions against malware injections, data breaches, identity theft attempts, and network attacks.
An additional layer of vulnerabilities can also originate in old legacy modules and infrastructures that you integrate with your application. Pay close attention to the environment in which your app operates and deliver security patches when necessary.
While security is a tricky subject, businesses face another significant challenge before the app even takes off: policies and regulations. Financial software must obey field- and country-specific laws, and it can be difficult to unravel these legal intricacies without professional assistance.
2021 Trends for Fintech Applications
While the discussed challenges are something all companies have to overcome, development trends can help your app climb to the top of any app store’s listing.
This year, fintech trends include:
- Biometric and multi-step authentication
- Dynamic CVV2 codes
- Chatbots and artificial intelligence to enhance user experience
- Solutions to improve financial literacy
- Voice assistants
Crucial Features to Include in Your Fintech Platform
The functionality for your application should prioritize relevance over novelty. Overall, some of the must-have features that the best fintech apps offer include:
- Payments: Enable money transfers. If your app is not focused on payments, consider integrating third-party services like Stripe or PayPal.
- Security: Multi-step authentication, encryption, data obfuscation, compliance with PCI DSS, KYC, and other applicable policies are all must-have features to make your app secure.
- Profile: A user should be able to fill in the banking information just one time, rather than go through the same process before each transaction.
- Analytics and machine learning: Offer analytical toolkits, especially for investment (including cryptocurrency trading) and insurtech apps.
- Cashback: Improve customer retention by returning a small percentage of payments to users.
- A scanner for card numbers and QR codes.
All fintech apps should also have the following common functionality:
- Sign up/log in
- Chatbots and 24/7 technical support
- Optional third-party services, such as delivery, relevant to your app’s specialty
Remember to solve the most pressing problems in your chosen niche and avoid overstuffing your application with redundant features. Make your app useful, sleek, and simple, and it will quickly win new users’ loyalty.
How Much Does It Cost to Build a Fintech App?
The development cost for a fintech app depends on the desired functionality, design, deadlines, and technologies used. Most financial technology startups will be able to afford a quality application suitable for field testing.
Hiring developers from the U.S. will cost you $168 per hour on average, $35 for Eastern European engineers, and $26 for tech talent from India. Therefore, a typical fintech application will fall between $30,000 and $160,000 to build.
How to Get Started?
Any endeavor to bring your fintech ideas to life should start with thorough research of the market you’re planning to enter.
Still, gaining an understanding of how the industry works is only half the deed. Many people struggle with figuring out how to actually create a fintech app. Read on to learn about five primary steps every business goes through in the process of developing a financial mobile application.
1. Find a niche
Start by determining a narrow field within the industry that your app will dominate. Every fintech business plan begins with a clear understanding of exactly what audiences you target, what problems you are going to solve, and how your company is different from your niche’s competition.
2. Study the regulations
The financial sector is subject to strict laws and regulations. You need to consider the fintech policies of each location where you expect to launch your product before diving into development. To meet all the requirements, it’s frequently beneficial to seek consultation from a specialized lawyer.
3. Outline your project
Once you know the purpose and legal requirements for your app, it’s time to create a plan for your project. Write down all of your company’s goals, success metrics, budget figures, and desired features. This is also the time to start designing and executing the first steps in your marketing campaign.
4. Hire a development team
The success of the top fintech apps largely depends on choosing the right software development company for collaboration. Survey multiple options and discuss the project with developers before making the final decision. Once you gather the team, make sure to maintain open communication channels and don’t shy away from receiving or giving suggestions on how to improve your app.
5. Ask for feedback and polish the app
Once you launch the initial version of the application, monitor users’ feedback closely. Look for bug reports and improvement suggestions. Consider using the continuous integration (CI) and continuous delivery (CD) paradigm to make your development process more robust.
Entering the Fintech Market in 2021
Financial services technology companies, just like many other digital fields, are propelled by the COVID-19 pandemic this year. Although it may seem impossible to enter the fast-growing market, the demand for online banking is rising as more and more people adopt safer, more convenient mobile technologies.
With the right development team and thorough planning, a fintech project in 2021 can transform into an extremely promising IT venture.